Uhuru Will Never Sign the Cap Interests Bill in to Law

[Simanova]

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Simple: The family business is banking. He is in place to help the family business. So the suffering of millions will come subordinate to his family interests.

Prepare to hear all manner of procured opinions against the proposed law. A massive media campaign on how it would ruin the economy and chase investors. The fact that a harsher law is in South Africa will be dismissed as not relevant. He will then not sign it or try to legislate by writing his own law.

[RV Pundit]

Something out to be done about the interest rate but capping is not the solution for me. I don't see it working but maybe we should try it for 1 yr.

[Simanova]

I have not read the bill. I assume it caps interests once the total including the loan amounts to double or triple the amount borrowed or something.

It isnt anything new as most countries require that you declare material breach of contract and recall the entire loan as early as possible. This is triggered by default in repayment.

Something out to be done about the interest rate but capping is not the solution for me. I don't see it working but maybe we should try it for 1 yr.

[Georgesoros]

Am sorry but capping interest rates is not the answer. Mpigs have not enacted laws that will institute competition that brings rates down. They are inept at the best. Uhuru is also asleep. He has failed in building a middle class based economy or even a foundation for this.

[Nefertiti]

Banks are getting efficient; they should diversify and cope with narrow margins.

@Pundit - without a legal cap the only way to ensure fair rates is to kill their cartel -- the bankers association. Increasing cash accessibility has a bigger economic payoff than a few banks minting billions year- on- year. We need proper competition in banking sector like telco calling rates.

2,036 staff fired by banks in 2015 after automation

http://www.the-star.co.ke/news/2016/08/04/2036-staff-fi-red-by-banks-in-2015-after-automation_c1397849

[hk]

Uhuru will not sign it and he'd be right to not sign it. If the legislation was enacted today the lending rate would be 14.5% . Hardly a solution to high interest rates, 14.5% surely can't be a conducive rate to borrow. The solution is in the government either reducing borrowing , collect more taxes by expanding the base or find another alternative to get cheap credit.
Of the three there's a ready solution in place waiting for enactment. That is M-akiba where citizens can buy T-bills at a denomination of 3k via mobile money. This would offer competition to banks since their business model is collecting cheap money and buying T-bills. Loads of people would line up to buy T-bills which would drive interest rates down. And also effectively raising T-bill buyers income on savings from the measly 1% they're earning.
This is what essentially kibaki did by collecting more money from a low base of about 250b to 750b. Uhuru is collecting more 1.3t with increased growth in economy, however he's unlucky he has constitution that bloated the government. A cap on investment on infrastructure only would also help to curtail spending.

[RV Pundit]

Yeah great news on that. I am not convinced there is banking cartel. I think treasury & central bank should have the FREEHAND to manage the economy. All we need is better more independent more world class central bank.

Banks are getting efficient; they should diversify and cope with narrow margins.

@Pundit - without a legal cap the only way to ensure fair rates is to kill their cartel -- the bankers association. Increasing cash accessibility has a bigger economic payoff than a few banks minting billions year- on- year. We need proper competition in banking sector like telco calling rates.

[RV Pundit]

Btw what happened to M-Akiba. I think CBK & Treasury have not done enough to advertise this. Yeah banks are making a killing from tbills & bonds. We tried Eurobond but forex risks are way too much. We should not even consider reducing spending..we need to invest and borrow more... Maybe our banks are too small to take on big lending risk..and we need say 10 big banks..instead of 45 small banks. Not everyone should own a bank. Let the rest become Saccos/MFIS.

Uhuru will not sign it and he'd be right to not sign it. If the legislation was enacted today the lending rate would be 14.5% . Hardly a solution to high interest rates, 14.5% surely can't be a conducive rate to borrow. The solution is in the government either reducing borrowing , collect more taxes by expanding the base or find another alternative to get cheap credit.
Of the three there's a ready solution in place waiting for enactment. That is M-akiba where citizens can buy T-bills at a denomination of 3k via mobile money. This would offer competition to banks since their business model is collecting cheap money and buying T-bills. Loads of people would line up to buy T-bills which would drive interest rates down. And also effectively raising T-bill buyers income on savings from the measly 1% they're earning.
This is what essentially kibaki did by collecting more money from a low base of about 250b to 750b. Uhuru is collecting more 1.3t with increased growth in economy, however he's unlucky he has constitution that bloated the government. A cap on investment on infrastructure only would also help to curtail spending.

[hk]

Btw what happened to M-Akiba. I think CBK & Treasury have not done enough to advertise this. Yeah banks are making a killing from tbills & bonds. We tried Eurobond but forex risks are way too much. We should not even consider reducing spending..we need to invest and borrow more... Maybe our banks are too small to take on big lending risk..and we need say 10 big banks..instead of 45 small banks. Not everyone should own a bank. Let the rest become Saccos/MFIS.

[/quote]
The CBK is dithering on this it was suppose to launched early this year. I understand the problem is getting brokers or dealers who'd combine the small denomination T-bills to big ones that can then buy from CBK .http://allafrica.com/stories/201603160199.html If the CBK doesnt work quickly I know a few kenyans working on a way around it.

[Georgesoros]

Uhuru is the BOSS. If he wanted to reduce the size of govt, it will not take a min. THe govt is too big for the size of people served. Most of monety collected goes to pay the bureaucracy leaving nothing for development.

Uhuru will not sign it and he'd be right to not sign it. If the legislation was enacted today the lending rate would be 14.5% . Hardly a solution to high interest rates, 14.5% surely can't be a conducive rate to borrow. The solution is in the government either reducing borrowing , collect more taxes by expanding the base or find another alternative to get cheap credit.
Of the three there's a ready solution in place waiting for enactment. That is M-akiba where citizens can buy T-bills at a denomination of 3k via mobile money. This would offer competition to banks since their business model is collecting cheap money and buying T-bills. Loads of people would line up to buy T-bills which would drive interest rates down. And also effectively raising T-bill buyers income on savings from the measly 1% they're earning.
This is what essentially kibaki did by collecting more money from a low base of about 250b to 750b. Uhuru is collecting more 1.3t with increased growth in economy, however he's unlucky he has constitution that bloated the government. A cap on investment on infrastructure only would also help to curtail spending.

[Nefertiti]

Bankers engage in this malpractice through their cartel bankers association. Our CBK is improving but we are a LONG WAY to worldclass especially from political interference.

Well done to competition authority.

Advertising firms fined Sh11.6m for fixing minimum rates

http://mobile.nation.co.ke/business/Advertising-firms-fined-Sh116m-for-fixing-minimum-rates/1950106-3335892-igiidb/index.html

Yeah great news on that. I am not convinced there is banking cartel. I think treasury & central bank should have the FREEHAND to manage the economy. All we need is better more independent more world class central bank.

Banks are getting efficient; they should diversify and cope with narrow margins.

@Pundit - without a legal cap the only way to ensure fair rates is to kill their cartel -- the bankers association. Increasing cash accessibility has a bigger economic payoff than a few banks minting billions year- on- year. We need proper competition in banking sector like telco calling rates.

[Georgesoros]

lawmakers have miserably failed to create a framework whereby competition prevails and now they want to take an easy way that will only purnish the economy. Capping rates will onyl hurt long the term economy. 

Bankers engage in this malpractice through their cartel bankers association. Our CBK is improving but we are a LONG WAY to worldclass especially from political interference.

Well done to competition authority.

Advertising firms fined Sh11.6m for fixing minimum rates

http://mobile.nation.co.ke/business/Advertising-firms-fined-Sh116m-for-fixing-minimum-rates/1950106-3335892-igiidb/index.html

Yeah great news on that. I am not convinced there is banking cartel. I think treasury & central bank should have the FREEHAND to manage the economy. All we need is better more independent more world class central bank.

Banks are getting efficient; they should diversify and cope with narrow margins.

@Pundit - without a legal cap the only way to ensure fair rates is to kill their cartel -- the bankers association. Increasing cash accessibility has a bigger economic payoff than a few banks minting billions year- on- year. We need proper competition in banking sector like telco calling rates.

[hk]

The banks have started feeling the pressure to lower interest rates without capping the rates http://www.businessdailyafrica.com/Banks-rally-to-lower-cost-of-loans-amid-looming-cap-threat/539552-3339376-q3x8xw/index.html . Lending by risk assessment is the way to go if implemented.

[RVtitem]

You were right. It seems uhuru will not cap interest rates. He is part of the problem.

www.nation.co.ke/news/Uhuru-seeks-way-out-of-rates-dilemma/1056-3351206-12an829/index.html

[RVtitem]

Many country do it...i see that a cap of 500% still makes a lot of sense!!

https://www.theguardian.com/money/blog/2010/may/29/interest-rates-cap

[patel]

Simple: The family business is banking. He is in place to help the family business. So the suffering of millions will come subordinate to his family interests.

Prepare to hear all manner of procured opinions against the proposed law. A massive media campaign on how it would ruin the economy and chase investors. The fact that a harsher law is in South Africa will be dismissed as not relevant. He will then not sign it or try to legislate by writing his own law.

Bank owned uhuru has thrown kenyans under the bus.